Safflane Holdings Ltd. et al v. Gagosian Gallery, Inc.

Filing 30

ANSWER to Complaint. Document filed by Gagosian Gallery, Inc..(Bart, Hollis)

WITHERS BERGMAN LLP
Holls Gonerka Bar (HB-8955)

Brian Dunefsky (BD-3554)
Dara G. Hamerman (DH-1591)
Azmina Jasani (AJ -4161)
430 Park Avenue, 10th Floor

New York, New York 10022
212.848.9800 (P)

212.848.9888 (f)
Attorneys for defendant Gagosian Gallery, Inc.

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
------------------------------------------------------- )(
SAFFLANE HOLDINGS LTD., and
ROBERT WYLDE,
Plaintiffs,

Case No.: 11 CIV 1679 (DLC)

ANSWER TO PLAINTIFFS' FIRST

AMENDED COMPLAINT
-against -

GAGOSIAN GALLERY, INC.,
Defendant.
------------------------ ------ -------------------------- )(

Defendant Gagosian Gallery, Inc. ("Gagosian Gallery"), by and through its attorneys
Withers Bergman LLP, as and for its Answer to the Amended Complaint, states as follows:

THE PARTIES
1. Gagosian Gallery denies knowledge or information suffcient to admit or deny the

allegations in paragraph 1.
2. Gagosian Gallery denies knowledge or information sufficient to admit or deny the

allegations in paragraph 2.
3. Gagosian Gallery admits the allegations in paragraph 3.

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JURISDICTION AND VENUE

4. Gagosian Gallery states that paragraph 4 pleads a legal conclusion to which no
answer is required, but to the extent that an answer is required, Gagosian Gallery denies
knowledge or information sufficient to admit or deny the allegations in paragraph 4.
5. Gagosian Gallery states that paragraph 5 pleads a legal conclusion to which no

answer is required, but to the extent that an answer is required, Gagosian Gallery denies
knowledge or information sufficient to admit or deny the allegations in paragraph 5.

6. Gagosian Gallery denies the allegations in the first sentence of paragraph 6, and
respectfully refers the Cour to the Complaint, and states that the second sentence of paragraph 6
pleads a legal conclusion to which no answer is required, but to the extent a response is required,
but to the extent that an answer is required, Gagosian Gallery denies that Plaintiffs are entitled to
any recovery in this case.

7. Gagosian Gallery states that paragraph 7 pleads a legal conclusion to which no
answer is required, but to the extent that an answer is required, Gagosian Gallery denies

knowledge or information sufficient to admit or deny the allegations in paragraph 7, but admits
that a substantial portion of

the events and omissions giving rise to Plaintiffs' claims occurred in

this District.

FACTUAL BACKGROUND

8. Gagosian Gallery states that paragraph 8 does not require a response, but to the
extent that a response is required, Gagosian Gallery denies knowledge or information sufficient to
admit or deny the statements made in paragraph 8, and states that Plaintiffs are judicially estopped

from pleading inconsistent facts, as they have done here or in the Met v. Sajjane action.

9. Gagosian Gallery denies the allegations in paragraph 9, but admits that Gagosian
Gallery is one of

the most important contemporary ar galleries in the world, and affirmatively
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avers that Gagosian Gallery maintains a total of 11 galleries throughout the world, is partially
owned by Larry Gagosian, and is managed by Larry Gagosian and a management team.

10. Gagosian Gallery denies the allegations in paragraph 10, but admits that Tansey, an
American postmodern painter known for monochromatic works and elaborate paintings
incorporating hidden text and symbols, was born in 1949 in San Jose, California. The prices at

which Tansey's works of art have been sold wil be provided in discovery.

11. Gagosian Gallery denies the allegations in paragraph 11, but admits that Prince, an
Panama, and that the work of art

American appropriation artist was born in 1949 in the Republic of

made the subject of

this action sold for $2.5 milion.

TANSEY FACTS
12. Gagosian Gallery denies the allegations in paragraph 12, but admits that in or about

Defendants salespersons, issued an invoice

late July, 31, 2009, Defendant, by John Good, one of

to Plaintiff Saffane, by its authorized representative, Wylde, for the painting by Mark Tansey,
entitled "The Innocent Eye Test."

13. Gagosian Gallery denies the allegations in paragraph 13.
14. Gagosian Gallery states that paragraph 14 pleads a legal conclusion to which no
response is required, but to the extent a response is required, Gagosian denies the allegations in
paragraph 14, but admits that since 2004 Wylde, as Safflane's authorized representative, has
engaged in at least 10 transactions with Gagosian Gallery, and that Plaintiffs are active collectors
of the works of Tansey, and that they are experienced art collectors who are known for wanting to

improve and complement their ar collection, and are known for doing extensive research before
Wylde decides to purchase works of art.

15. Gagosian denies the allegations in paragraph 15, but admits that between on or
about July 20, 2009 to and including the date Plaintiff Safflane was invoiced on July 31, 2009,
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John Good relayed to Robert Wylde exactly what Charles Cowles had told John Good - namely,
that the Tansey Painting was no longer being exhibited at the Metropolitan Museum of Art (the
"Met"), the Tansey Painting had been properly retured to Cowles by the Met, Cowles owned the

Tansey Painting, it was hanging in Cowles' gallery, and the Tansey Painting could be sold to
Saffane. Gagosian further admits that Good and Wylde exchanged a series of emails on July 28,

2009 with the subject line "promised gift of charles cowls in honour of Willam s. Lieberman."

16. Gagosian Gallery denies the allegations in paragraph 16, but admits that as a
collector of

Tansey works, Plaintiff

was aware that the Tansey Painting had been displayed at the

Met, that the Tansey Painting is an iconic piece, and that works by Tansey are relativey scarce.

17. Gagosian Gallery states that the allegations in paragraph 17 plead a legal
conclusion to which no answer is required, but to the extent that an answer is required, Gagosian
Gallery denies the allegations in paragraph 17.

18. Gagosian Gallery denies the allegations in paragraph 14, but admits that, at the
request of

Wylde, John Good arranged for Wylde to view the Tansey Painting at Cowles' gallery,

located at 84 Mercer Street in New York City, and that on or about July 27,2009, Wylde and John

Good viewed the Tansey Painting at Cowles' gallery.

19. Gagosian Gallery states that the allegations in paragraph 19 plead a legal
conclusion to which no answer is required, but to the extent that an answer is required, Gagosian
Gallery states the following:
1. Gagosian Gallery denies the allegations in paragraph (i), but admits John
Good relayed to Robert Wylde exactly what Charles Cowles had told John
Good, namely, that the Tansey Painting was no longer being exhibited at
the Met, the Tansey Painting had been properly returned to Cowles by the
Met, Cowles owned the Tansey Painting, it was hanging in Cowles' gallery,
and the Tansey Painting could be sold to Safflane.;

11. Gagosian Gallery admits the allegations in paragraph (ii);

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111. Gagosian Gallery admits the allegations in paragraph (iii);

iv. Gagosian Gallery states that paragraph (iv) pleads a legal conclusion to
which no response is required, but to the extent a response is required
Gagosian Gallery admits the allegations, but denies that a special
relationship developed;
v. Gagosian Gallery denies the allegations in paragraph (v); and

V1. Gagosian Gallery denies the allegations in paragraph (vi).
20. Gagosian Gallery denies knowledge or information sufficient to admit or deny the

allegations in paragraph 20, but admits that in or about April 2010, Gagosian Gallery learned for
the first time that the Met, through gifts made by Cowles and his mother, held a 31 % undivided
interest in the Tansey Painting.

21. Gagosian Gallery denies the allegations in paragraph 21, and affirmatively avers
that Wylde, a seasoned collector of

confirms that, he was aware of

Tansey, conducted his own research and due diligence, which
the Met's interest in the Tansey Painting before he decided to

purchase it from Cowles.

22. Gagosian Gallery states that paragraph 22 states a legal conclusion to which no
answer is required, but to the extent that an answer is required, Gagosian denies the allegations in
paragraph 22.

23. Gagosian Gallery denies the allegations in paragraph 23, but admits that it issued an
invoice to Plaintiff Safflane dated July 31, 2009 for the Tansey Painting.
24. Gagosian Gallery denies the allegations in paragraph 24, but admits that payment in

full was made on or about August 5, 2009, and thereafter the Tansey Painting was delivered to
Plaintiffs.

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25. Gagosian Gallery denies the allegations in paragraph 25, and respectfully refers the

the

Court to the invoice, but affirmatively avers that Gagosian Gallery acted to facilitate the sale of

Tansey Painting by Cowles, a disclosed principal, to Plaintiffs.
26. Gagosian Gallery denies the allegations in paragraph 26 and respectfully refers the

Cour to the April 2, 2010 memorandum.
plaintiff

27. Defendant states that paragraph 27 pleads expressions of

Wylde's mental

state to which no response is required. To the extent a response is required, Defendant denies the
allegations in paragraph 27, and affirmatively avers that Gagosian Gallery acted to facilitate the
sale of

the Tansey Painting by Cowles, a disclosed principal, to Plaintiffs.
plaintiff

28. Defendant states that paragraph 27 pleads expressions of

Wylde's beliefs

and mental state to which no response is required. To the extent a response is required, Defendant

denies the allegations in paragraph 28, and affirmatively avers that Gagosian Gallery acted to
facilitate the sale of

the Tansey Painting by Cowles, a disclosed principal, to Plaintiffs.
PRINCE FACTS

29. Gagosian Gallery denies the allegations in paragraph 29, and states that these facts
wil be learned through the discovery process.

30. Gagosian Gallery admits the allegations in paragraph 30.

31. Gagosian Gallery denies the allegations in paragraph 31.
32. Gagosian Gallery denies the allegations in paragraph 32, but admits that Gagosian
Gallery issued an invoice dated October 23,2009 for the Prince Painting for the sum of
$2,200,000.00, and denies knowledge or information sufficient to admit or deny whether Plaintiff
Wylde was unable to initiate a wire transfer or his intentions for initiating the wire transfer on the
following Monday.
33. Gagosian Gallery admits the allegations in paragraph 33.
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34. Gagosian Gallery states that paragraph 34 pleads a legal conclusion to which no
answer is required, but to the extent that an answer is required, Gagosian denies the allegations in
Wylde that Gagosian Gallery had

paragraph 34, but admits that John Good later advised Plaintiff

received a higher offer.
35. Gagosian Gallery denies the allegations in paragraph 35, and affirmatively avers
that no contract to sell a painting is formed until payment is made in fulL.

TANSEY CLAIMS

AS AND FOR A FIRST CAUSE OF ACTION
(Breach of

Express Waranty of

Title)

36. Gagosian Gallery's responses to paragraphs 1-28 inclusive, are incorporated herein
by reference.

37. Gagosian Gallery denies the allegations in paragraph 37.
38. Gagosian denies the allegations in paragraph 15, but admits that John Good
conveyed to Robert Wylde exactly what Charles Cowles had told Good, namely, that the Tansey

Painting was no longer being exhibited at the Met, had been retued to Cowles, could be sold to
Saffane and good, clear and unencumbered title to the Tansey Painting could be conveyed to

Plaintiff Saffane.

39. Gagosian Gallery denies the allegations in paragraph 39.

40. Gagosian Gallery denies the allegations in paragraph 40.
41. Gagosian Gallery denies the allegations in paragraph 41.
AS AND FOR A SECOND CAUSE OF ACTION
(Breach of

Implied Warranty of

Title)

42. Gagosian Gallery's responses to paragraphs 1-28 inclusive, are incorporated herein
by reference.

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43. Gagosian Gallery denies the allegations in paragraph 43.
44. Gagosian Gallery denies the allegations in paragraph 44.
45. Gagosian Gallery denies the allegations in paragraph 45.

46. Gagosian Gallery denies the allegations in paragraph 46.
AS AND FOR A THIRD CAUSE OF ACTION
Merchantabilty)
(Breach oflmplied Warranty of

47. Gagosian Gallery's responses to paragraphs 1-28 inclusive, are incorporated herein
by reference.

48. Gagosian Gallery denies the allegations in paragraph 48.
49. Gagosian Gallery denies the allegations in paragraph 49.
50. Gagosian Gallery denies the allegations in paragraph 50.
AS AND FOR A FOURTH CAUSE OF ACTION
(Breach of Contract)

51. Gagosian Gallery's responses to paragraphs 1-28 inclusive, are incorporated herein
by reference.
52. Gagosian Gallery denies the allegations in paragraph 52 and respectfully refers the

Cour to the invoice.

53. Gagosian Gallery admits the allegations in paragraph 53.

54. Gagosian Gallery denies the allegations in paragraph 54.
55. Gagosian Gallery denies the allegations in paragraph 55.
AS AND FOR A FIFTH CAUSE OF ACTION
(Fraud)

56. Gagosian Gallery's responses to paragraphs 1-28 inclusive, are incorporated herein
by reference.

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57. Gagosian Gallery denies the allegations in paragraph 57.
58. Gagosian Gallery denies the allegations in paragraph 58.

59. Gagosian Gallery denies the allegations in paragraph 59.
60. Gagosian Gallery denies the allegations in paragraph 60.
61. Gagosian Gallery denies the allegations in paragraph 61.
AS AND FOR A SI)(TH CAUSE OF ACTION
(N egligent Misrepresentation)

62. Gagosian Gallery's responses to paragraphs 1-28 inclusive, are incorporated herein
by reference.

63. Gagosian Gallery denies the allegations in paragraph 63.
64. Gagosian Gallery denies the allegations in paragraph 64.
65. Gagosian Gallery denies the allegations in paragraph 65.
66. Gagosian Gallery denies the allegations in paragraph 66.
67. Gagosian Gallery denies knowledge or information sufficient to admit or deny the

allegations in paragraph 67.

68. Gagosian Gallery denies the allegations in paragraph 68.
69. Gagosian Gallery denies the allegations in paragraph 69.
AS AND FOR A SEVENTH CAUSE OF ACTION
New York Ars and Cultual Affairs Law § 13.03)
(Violation of
70. Gagosian Gallery's responses to paragraphs 1-28 inclusive, are incorporated herein
by reference.

71. Gagosian Gallery denies the allegations in paragraph 71.
72. Gagosian Gallery admits the allegations in paragraph 72.

73. Gagosian Gallery denies the allegations in paragraph 73.

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AS AND FOR AN EIGHTH CAUSE OF ACTION
(Unjust Enrichment)

74. Gagosian Gallery's responses to paragraphs 1-28 inclusive, are incorporated herein
by reference.

75. Gagosian Gallery denies the allegations in paragraph 75.
76. Gagosian Gallery denies the allegations in paragraph 76.
77. Gagosian Gallery denies the allegations in paragraph 77.
78. Gagosian Gallery denies the allegations in paragraph 78.
PRINCE CLAIMS

AS AND FOR A NINTH CAUSE OF ACTION
(Repudiation and/or Breach of Contract)

79. Gagosian Gallery's responses to paragraphs 1-9, 11, and 29-35 inclusive, are
incorporated herein by reference.

80. Gagosian Gallery denies the allegations in paragraph 80.
81. Gagosian Gallery denies knowledge or information sufficient to admit or deny the

allegations in paragraph 81.

82. Gagosian Gallery denies the allegations in paragraph 82, but admits that Gagosian
Gallery subsequently sold the Prince Painting to another buyer for a higher price.

83. Gagosian Gallery denies the allegations in paragraph 83.
AS AND FOR A TENTH CAUSE OF ACTION
(Deceptive and Misleading Business Practices -GBL §§ 349 et. seq.)

84. Gagosian Gallery's responses to paragraphs 1-9, 11, and 29-35 inclusive, are
incorporated herein by reference.

85. Gagosian Gallery denies the allegations Ín paragraph 85.

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86. Gagosian Gallery denies the allegations in paragraph 86, but admits that Gagosian
Gallery is an art gallery that sells works of art to the public at large.

87. Gagosian Gallery denies the allegations in paragraph 87.
88. Gagosian Gallery denies the allegations in paragraph 88.
AS AND FOR AN ELEVENTH CAUSE OF ACTION
(Unjust Enrichment)

89. Gagosian Gallery's responses to paragraphs 1-9, 11, and 29-35 inclusive, are
incorporated herein by reference.

90. Gagosian Gallery denies the allegations in paragraph 90.
91. Gagosian Gallery denies the allegations in paragraph 91.
92. Gagosian Gallery denies the allegations in paragraph 92.
93. Gagosian Gallery denies the allegations in paragraph 93.
AS AND FOR A TWELFTH CAUSE OF ACTION
(Breach of

Good Faith and Fair Dealing)

the Implied Covenant Of

94. Gagosian Gallery's responses to paragraphs 1-9, 11, and 29-35 inclusive, are
incorporated herein by reference.

95. Gagosian Gallery denies the allegations in paragraph 95.

96. Gagosian Gallery denies the allegations in paragraph 96.
AS AND FOR A THIRTEENTH CAUSE OF ACTION
(Specific Performance)

97. Gagosian Gallery's responses to paragraphs 1-9, 11, and 29-35 inclusive, are
incorporated herein by reference.

98. Gagosian Gallery denies the allegations in paragraph 98.
99. Gagosian Gallery denies the allegations in paragraph 99.
100. Gagosian Gallery denies the allegations in paragraph 100.

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FIRST AFFIRMATIVE DEFENSE
101. Gagosian Gallery alleges that the Complaint, and each purorted cause of action
alleged therein, fails to state facts sufficient to constitute a cause of action against Gagosian upon
which relief may be granted.

SECOND AFFIRMATIVE DEFENSE
102. Gagosian Gallery alleges that Plaintiffs' contract claims on the Tansey Painting

cannot be maintained against Gagosian Gallery because Gagosian Gallery merely facilitated the
sale of the Tansey Painting to Plaintiffs by a fully disclosed principaL.

THIRD AFFIRMATIVE DEFENSE
103. Gagosian Gallery alleges that Plaintiffs' fraud claim is foreclosed because

Plaintiffs played an active role in and directly communicated with Charles Cowles concerning a
contract to buy the Tansey Painting, Plaintiffs have not sufficiently alleged

justifiable reliance, and

their breach of contract claim.

Plaintiffs' fraud claim is duplicative of

FOURTH AFFIRMATIVE DEFENSE
104. Gagosian Gallery alleges that Plaintiffs' negligent misrepresentation claim

concerning the Tansey Painting cannot be maintained because Plaintiffs did not reasonably rely on

any representation of Gagosian Gallery, Plaintiffs did not have a special relationship with
Gagosian Gallery, and Plaintiffs' negligent misrepresentation claim is duplicative of

Plaintiffs'

breach of contract claim.

FIFTH AFFIRMATIVE DEFENSE
105. Gagosian Gallery alleges that Plaintiffs' New York Arts and Cultural Affairs Law §

13.03 claim cannot be maintained because that statute does not provide for civil liability.

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SIXTH AFFIRMATIVE DEFENSE
106. To the extent that Defendants made misrepresentations to Plaintiffs with regard tö

the title of the Tansey Painting, such statements were information Charles Cowles gave to
Gagosian Gallery for the express purpose of inducing Plaintiffs to purchase the Tansey Painting.

SEVENTH AFFIRMATIVE DEFENSE
107. Gagosian Gallery alleges that Plaintiffs' claims cannot be maintained because

Wylde, a seasoned collector, does his own research and due diligence before purchasing works of
art, and in the case of

the Tansey Painting, decided to purchase it after having seen it in Cowles'

apartment and confirming with Cowles that it was his to sell.

EIGHTH AFFIRMATIVE DEFENSE
Plaintiffs' causes of

108. Gagosian Gallery alleges that all of

action for repudiation

and/or breach of contract and unjust enrichment cannot be maintained because there was no
binding contract between the Plaintiffs and Gagosian Gallery with respect to the Prince Painting.

NINTH AFFIRMATIVE DEFENSE
109. Gagosian Gallery alleges that Plaintiffs has not stated a claim for deceptive and

misleading business practices under New York General Business Law § 349 because a private
transaction does not give rise to a violation of

New York General Business Law § 349.

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Dated: New York, New

York

Respectfully submitted,

June 27,2011
WITHERS BERGMAN LLP

By: ~~/~
Holls Gonerka Bart (HB-8955)

Brian Dunefsky (BD-3554)
Dara G. Hamerman (DH-1591)

Azmina Jasani (AJ-4161)
430 Park Avenue, 10th Floor

New York, NY 10022-3505
Phone: [phone]
Fax: [phone]

Attorneys for Defendant Gagosian Gallery, Inc.

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CERTIFICATE OF SERVICE
the foregoing was served upon the

The Undersigned hereby certifies that a copy of

following via ECF on this the 27 day of June, 2011:

Aaron Richard Golub, Esq.
Aaron Richard Golub, Esquire, P.C.
34 East 6ih Street, 3rd Floor

New York, New York 10065
Attorneys for plaintiffs, Safflane Holdings Ltd., and Robert Wylde

fJ~/~

COUNSEL FOR DEFENDANT GAGOSIAN
INC.
GALLERY
Holls Gonerka Bar (HB-8955)

Brian Dunefsky (BD-3554)
Dara G. Hamerman (DH-1591)
Azmina J as

ani (AJ -4161 )

Withers Bergman LLP
430 Park Avenue, 10th Floor

New York, New York 10022
(P) 212-848-9800

(f) 212-848-9888

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